In its largest deal so far in a recent string of acquisitions, Onit, the Houston company that provides enterprise workflow products for corporations and corporate legal departments, has acquired SecureDocs, a Santa Barbara, Calif., software company with products for contract management, virtual deal rooms and electronic signatures.
Onit says the acquisition strengthens its position as a leading, modern contract lifecycle management (CLM) provider, expanding its product portfolio from enterprise-level CLM to include a quickly deployable contract management solution for new and growing legal operations teams.
Although terms of the deal were not revealed, Eric M. Elfman, Onit’s CEO and cofounder, told me this was its largest acquisition to date.
Onit has made a series of acquisitions in recent years, starting with its acquisition of SimpleLegal, a legal operations platform, in May 2019, four months after private equity firm K1 Investment Management invested $200 million in Onit.
In November 2020, Onit acquired McCarthyFinch, provider of a suite of AI-driven contract management software, then, a month later, it acquired AXDRAFT, developer of contract automation software.
Last September, it acquired Bodhala, a company whose SaaS platform provides in-house legal departments with AI-powered legal spend analytics, benchmarking and market intelligence, and then, four weeks later, it acquired BusyLamp, provider of legal spend and matter management software for European corporate legal departments.
“We established a successful pattern with the launch of Onit’s enterprise legal management (ELM) a decade ago and the subsequent acquisitions of SimpleLegal, Bodhala and BusyLamp – extending ELM to everyone regardless of location or size,” said Elfman. “Now Onit is continuing this mission in CLM, offering a contract management solution for every company.”
SecureDocs launched in 2012 with its SecureDocs Virtual Data Room, a secure online repository for storing and sharing deal documents during financial transactions such as an M&A or financing.
Building from the same platform, it later launched ContractWorks, an easy-to-launch contract management system for midsized and smaller companies. Most recently, it launched ReadySign, an electronic signature solution.
Until 2014, it was owned by AppFolio, the company that also owned practice management platform MyCase from 2012 to 2020, when MyCase was sold to a private equity firm.
SecureDocs will operate within Onit’s SimpleLegal subsidiary, which provides legal operations software for companies such as Instacart, Zenefits and Fender.
Mark Weidick, general manager of SimpleLegal, said that he sees SimpleLegal and SecureDocs as an ideal combination to solve the challenges faced by companies starting or establishing modernized legal operations. “Our shared philosophy has contributed to our mutual successes at SecureDocs and SimpleLegal. We both build simple to use and modern software to help our customers manage everything that matters in legal operations.”
Will Reynolds, CEO and cofounder of SecureDocs, will continue to lead the company under Onit’s ownership as general manager of SecureDocs.
Targeting Corporate Customers
In an interview yesterday with Elfman, Weidick and Reynolds, Elfman noted that Onit had grown substantially since its founding in 2010 as a one-product company. It now has six different brands and 21 products for the corporate legal market. But he said the offerings all share a common theme that be boiled down into a simple two-by-two grid.
“We sell products that help companies manage their matters and their documents, and we only sell those to enterprise class customers and then middle-market customers, just south of Fortune 500,” Elfman said. “So it really is that simple. If a company almost of any size has a need around their matters, whether that’s matter management, spend management, enterprise legal management or their documents, whether that is CLM or doc gen or e-sign or virtual data rooms, Onit is targeting those types of needs for our corporate customers.”
Onit’s core enterprise legal management (ELM) products were designed to serve the high end of the corporate market, but its acquisition of SimpleLegal followed its recognition that those products did not scale well to the middle market, Elfman said.
The same is true for contract lifecycle management software, he said. “Onit CLM solves the high-end of the market, but if you want to, in a couple of days or a week, spin up a really slick, lighter contract life cycle management tool, we needed a different product.”
ContractWorks is that CLM product for the middle-market tier, he said.
Weidick said there were clear adjacencies at the product level between the three products from SecureDocs and the capabilities that SimpleLegal offers around e-billing spend management matter management that were obvious to both companies and that drove the deal. But he said there was also a similar adjacency or overlap with respect to customer segment.
“It’s those adjacencies at the product level and at the customer segmentation level that drove us to do this and, very importantly, to take an aggressive approach to integrating and merging the two businesses,” Weidick said.
‘More Compelling Package of Products’
Reynolds said he was not necessarily looking to be acquired, but that after meeting members of the Onit team at trade shows and speaking with Elfman, he was impressed that Elfman and his team understood exactly what SecureDocs was about and saw the potential in putting it together with SimpleLegal.
“This is about putting two things together and just going fast, taking a more compelling package of products out to the market and just going faster,” he said.
Weidick and Reynolds said that SecureDocs products will continue to be offered as standalone products, while Onit will invest in their further development.
However, within this year, they expect to develop tighter workflow integration between SimpleLegal and the SecureDocs products. Longer term, Elfman said, they will be looking at how the ContractWorks technology can be deployed in broader ways, including for both Onit and SimpleLegal customers.
Before founding Onit, Elfman and cofounder Eric Smith, now Onit’s chief technology officer, had founded DataCert, a provider of matter management and legal and IP spend management for corporate legal departments that was eventually acquired by Wolters Kluwer.
Related: LawNext Episode 27: Founder Eric Elfman on Onit’s $200M Investment.
